Advertising Won't Bounce Back Until The Second Quarter

NEW YORK (AdAge.com) -- Despite all the talk about upticks and
turnaround in the U.S. advertising market, don't hold your breath
for a rebound in the first quarter of this year, a new forecast
is warning. If you can hold your breath until the second quarter,
on the other hand, you might be in luck.

Revenue for U.S. media suppliers will total $36.8 billion for the
first quarter of 2010, according to Magna, the Interpublic Group
of Cos. forecasting unit. That's down 3% from $38 billion for the
same time last year -- a time that already felt pretty awful.

But that should get the media business to its turning point.
Citing the year-over-year growth in industrial production that's
projected for the second quarter, Magna's global director of
forecasting, Brian Wieser, predicted that the first quarter will
deliver the final ad spending decline of the downturn.

The year as a whole will see U.S. ad revenue come in essentially
flat -- down 0.1% -- Mr. Wieser predicted, raising his forecast
from an earlier prediction of a 1.3% decline. U.S. media will
generate roughly $161 billion of ad revenue in 2010, excluding
local TV revenue from political campaigns and national TV revenue
from the Olympics, according to the new projection.

Politics up, Olympics down
Political advertising this year will generate 15% more in ad
revenue for local TV suppliers, both broadcasters and local
cable, than it did in 2008 or 2006, with nearly $2.7 billion this
year compared to the $2.4 billion in revenue it generated in the
last two election years. That increase will come despite all the
presidential campaign spending in 2008, Mr. Wieser said, because
there are more races in presidential off-years and there is more
money constantly coming into the system.

Olympic spending this year, however, will not generate as much
incremental revenue as it did during the 2006 Olympics. The
approaching Winter Games will generate $488 million in
incremental revenue this year, according to Magna, compared to
$650 million in incremental revenue during the 2006 Olympics. NBC
recently said it will lose money on the
Olympics this year for the first time in memory.